medium · Private Credit loan-structures-instruments
A $500 million Collateralized Loan Obligation (CLO) collateral pool yields SOFR + 375 bps. The AAA tranche (representing 65% of capital) costs SOFR + 135 bps.
If total annual costs including junior debt tranches and fees equal $11.15 million and SOFR is 4.50%, what is the residual cash flow available to the $50 million Equity tranche?
- $7.60 million
- $3.25 million
- $12.40 million
- $18.75 million
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